Renting Unsold Property May Be a Good Move

Home owners who can’t or don’t want to sell their homes in today’s market but must move should consider renting out the property.

About Prореrtу Mаnаgеmеnt

Rental prореrtу mаnаgеmеnt refers tо thе рrосеѕѕеѕ аррlіеd tо mаxіmіzе rеturnѕ bу effective аdmіnіѕtrаtіоn of rental рrореrtу. The duties  of a property manager include

  • setting a rental price,
  • accepting rеnt,
  • rеѕроndіng tо аnd addressing mаіntеnаnсе іѕѕuеѕ,
  • avoiding legal pitfalls,
  • acting as a liaison between the landlord and tenant,
  • risk management
  • advertising vасаnсіеѕ for lаndlоrdѕ,
  • аnd dоіng сrеdіt аnd bасkgrоund сhесkѕ on tenants.

In exchange fоr thе ѕеrvісе рrоvіdеd, property management соmраnіеѕ сhаrgе lаndlоrdѕ a реrсеntаgе of thе gross rеnt соllесtеd еасh month, іn аddіtіоn tо lеаѕing commissions.
In аddіtіоn tо mаnаgіng іnсоmе аnd еxреnѕе rеlаtеd асtіvіtу, property managers may also mаnаgе соnѕtruсtіоn, dеvеlорmеnt, repair and mаіntеnаnсе оn a property. The direction оf rераіr аnd maintenance іѕ ԛuіtе a lаrgе part of a рrореrtу mаnаgеr’ѕ funсtіоn.

Property mаnаgеrѕ ѕhоuld develop a rеlаtіоnѕhір wіth the property оwnеr and tenants that іѕ bаѕеd оn a mutuаl truѕt and соmрlеtе confidence in оnе аnоthеr. Hіѕ аllіаnсе wіth tеnаntѕ gіvеѕ аn advantage to the landlord and рrоvіdеѕ thеm thе nесеѕѕаrу buffer ѕеrvісіng thеіr dеѕіrе tо рrоfіt аnd dіѕtаnсе thеmѕеlvеѕ frоm their tеnаnt соnѕtіtuеnсу.
There are mаnу aspects tо thіѕ рrоfеѕѕіоn, іnсludіng раrtісіраtіng іn аnd/оr іnіtіаtіng lіtіgаtіоn with tenants, соntrасtоrѕ аnd іnѕurаnсе аgеnсіеѕ. Litigation alone is аt times соnѕіdеrеd an entirely ѕераrаtе function, set aside fоr trained attorneys. Althоugh a person оr persons wіll be rеѕроnѕіblе fоr thіѕ іn thеіr jоb dеѕсrірtіоn, thеrе mау оr may nоt be аn аttоrnеу wоrkіng under a рrореrtу manager.

Special аttеntіоn is gіvеn tо Landlord/Tenant law and mоѕt соmmоnlу evictions, nоn-рауmеnt, hаrаѕѕmеnt, rеduсtіоn оf рrе-аrrаngеd ѕеrvісеѕ, аnd public nuisance are lеgаl ѕubjесtѕ that gаіn thе mоѕt аmоunt оf attention from рrореrtу mаnаgеrѕ. Thеrеfоrе, іt іѕ a nесеѕѕіtу that a рrореrtу mаnаgеr bе сurrеnt wіth new laws аnd рrасtісеѕ іn thеіr given lосаlіtіеѕ, сіtіеѕ аnd states.

Exсеllеnt рrореrtу management саn оnlу асhіеvеd by top-notch mаnаgеrѕ. Tо bе thе best іn thіѕ fіеld, one muѕt

  • knоw аnd ѕtау uрdаtеd оn lосаl оrdіnаnсеѕ аnd ѕtаtе lаwѕ;
  • bе hіghlу hоnеѕt аnd еthісаl іn еnfоrсіng рrореrtу rulеѕ and rеntаl policies;
  • bе dеtаіl oriented and оrgаnіzеd wіth paper wоrk;
  • hаvе gооd соmmunісаtіоn аnd соmрutеr ѕkіllѕ;
  • lіkе working wіth the рublіс;
  • have a strong ѕеnѕе of duty аnd commitment; аnd
  • be аn exceptional follow-up person.

Did you know that Nesbitt Realty will match any offer by any Realtor in Northern Virginia?

Obtaining a professional property manager is a good first step. Professional property managers charge 7 percent to 10 percent of the monthly rent in many areas. Nesbitt Realty is often cheaper than our competitors.

Current rents may not be high enough to cover carrying charges, including mortgage, taxes, and insurance. Nevertheless, renting out the property may still make sense if property values rise in the next few years.

Offering a 12-month lease that converts to month-to-month is a good idea, if the owners are considering selling eventually. Include language in the lease that allows a real estate professional to show the home to potential buyers with 24 hours’ notice to tenants.

For more information or to set up an appointment call Julie at (703)765-0300.

 

Advantages of Nesbitt Realty Property Management

Marketing

Nesbitt Realty’s website has one of the largest Internet footprints of any real estate site in Northern Virginia.  In addition our agents are skilled at leveraging MLS exposure, Internet articles, local print media and more. By using professional photography, videos updates, maps, and more we can make sure that buyers and renters have the information that they need to make an informed decision about your property.

Julie and Will
Julie and Will Nesbitt pause from property management to take a quick picture.

Daily Landlord Responsibilities

Nesbitt Realty provides and maintains a level of separation between the landlord and tenant so that we ensure that business matters are always handled in a business-like fashion.  Nesbitt Realty has systems in place to handle emergency repairs and can find the right provider at the right price to keep your investment in top shape.

Property Upkeep

Nesbitt Realty has a list of vendors that have proven to be reliable and reasonably price to handle problems when they arise. We are also willing to work with contractors, handymen and other providers that the landlord recommends. Property maintenance is never a profit center for us.

Communication

We always pick up the phone. We respond to all emails, in a timely fashion.

Rent Collection Service

We expect tenants to pay on time and we hold them accountable for late payments. We process rents quickly so that landlords get paid quickly. If needed, we serve late payment notices, eviction notices, etc.  to maintain orderly and regular rental income.

Rental Management Services

Here’s an email I recently sent to a landlord who has questions about our property management services.

As promised here is my detailed reply. I’m numbering my answers so you can compare to your questions below.
1. We locate tenants with a multi-pronged approach but we primarily attract tenants through the Multiple Listing Service and one of our many websites.  We do a background check on our applicants to learn credit history, employment history, income and criminal record.  We report the results to you along with a positive or negative recommendation depending on what our investigation uncovers.
Listing a property for rent is a separate service apart from property management.  Some landlords only use us to list property for rent.  Some landlords only use us for property management.  Most landlords do both.  Each time the property is listed for rent there is a fee to the landlord.
Our structure is a little different from most companies in that we explain where the commission goes and then let you set the fee as you wish. We make a recommendation for how much the landlord should pay, but allow the landlord to set the fee at any level. I think this makes more sense than setting an arbitrary number.  I would expect by glancing at your property online you will probably want to pay at least one half of one month’s rent to list the property, but you may wish to pay as much as three-quarters of a month rent. I can explain this at length when you contact us but in short some landlords sometimes pay higher commissions to attract more attention from agents.
In subsequent years, if the tenant stays on we don’t need to market the property and you won’t have to pay a commission.  When the tenant moves on we’ll need to list the property for rent again. Nearly every landlord is looking for a longer term renter for this reason.  The minimum lease we recommend is 12 months.  In the rare event that a lease is less than 12 months, we pad the rent to recoup the additional expense to the landlord.
2. Our brokerage currently manages about 100 properties.  We are a family business, not a large corporation.  Our landlords and tenants know us personally and we know them personally.  We do have a team approach. For example my wife handles the processing or rent checks and the preparation of monthly reports. My son often helps with dispatching handymen and with move-in and move-out inspections.  But no matter who you talk to the buck always stops with me and no matter who you talk to we generally all know what is going on with our properties.
Currently, we only have one member of the foreign service as a client but we have a good number of clients who are overseas. Some of our overseas clients are high-ranking military, intelligence service agents, foreign nationals who have returned to their home countries, diplomatic persons and I can even call to mind a couple of academics who are in the wilds doing field research. We are well-accustomed to the challenges of dealing with landlords who might be 8 to 12 hours different in time zone and who may or may not have regular access to a phone.
3. I do not own any properties in 22206.  We sold most of our own Northern VA rental properties a few years ago. Even then our properties were not in that zip code.  We still have some property that is out of the area and for that we rely on a property manager.  In fact, the only rentals we’ve ever had serious problems with are the properties which we owned and personally managed.
As an aside, without effort, I can call to mind 3 properties which we manage and that are in close proximity to your property.  Two of these are condos and one is a single-family residence.  The SFR is owned by an Indian technology guru who returned to India to raise his kids.  One of the two condos is owned by a recently retired judge who move back to his home state.  The third property is owned by a local attorney who does not want the hassle of managing his property. There may be a few more in your neighborhood, but those are the three that pop in my head.
4. We can inspect as often as you like, but we generally only inspect the property once per quarter.  We do not do the inspection ourselves.  Instead, we send a handyman who will check every system on the property and write up any deficiencies along with any recommendations.  There is a small fee for this inspection ($35 or so) to cover the handyman’s time.  But we do not charge anywhere near 10% of the monthly rent.  Our rates vary depending upon the property, but we will charge 6.5% of the monthly rent for a property such as yours.
5. We use a software called Rent Manager to track our landlord’s expenses and accounts. I will copy this email to my wife Julie who can send you and example report on Monday.
6. We do not charge a fee when the property is vacant.  We are only paid when you are paid.  Money in general does not flow from you to us.  Rather it flows from tenant to our company and then to your pocket.  Rent is due on the first of the month.  Most of the tenants pay sometime between the 29th and 3rd of the month.  There is a grace period until the fifth day of the month.  If rent is not received by the fifth of the month we charge a late fee to the tenant and swiftly ramp up to begin the eviction process. We quickly train any tenants to understand that we do not play around with rent and deadlines.
We pride ourselves on how quickly we get the money to our landlords.  Some companies take 10 to 15 days to process rents.  We usually deposit money into the landlord’s bank account within 24 hours of receiving payment.  Because of the extensive background checks mentioned above, we generally don’t have much problem with unpaid or late rents.
7. Tenants contact us for repairs and we select the most cost-effective and prompt solution available.  If the repairs are less than around $250 we generally do not get bids, we just make the work happen.  We allow landlords freedom to set their own notification level.  For most condos we recommend a $250 threshold.  For most townhouses and single-family homes we recommend $350.  However, yesterday a newly-made landlord asked that we set that number at $1. (Yes.  ONE dollar.) We will abide by her request.  A few of our busiest landlords don’t want to hear about bothered by anything less than $1k.
We do not “mark-up” any maintenance requests.  We do not charge anything extra to manage repairs. Maintenance is not a profit center for us.
8. Property reports are usually delivered just a few days after rents are processed.
Our clients like us because we are very responsive to both tenants and landlords.  We always seek out the most cost-effective solutions for our landlords.  We are not an enormous company.  You can call at any normal hour of the day and most likely reach the principal broker (me).  If you call at a strange hour, you still might reach me.  If you don’t reach me, I’ll call you back promptly. Most of our competitors charge higher fees than we charge. So we believe that our combination of price and service is very tough to beat.
I look forward to meeting you and thank you for the opportunity to be of service.
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Property Management 101

Property management is a business in and of itself. If you want to invest in real estate, but you don’t want to be a property manager, the solution is really quite simple: employ the services of Nesbitt Realty. Our property managers are experienced individuals who will manage the day-to-day operations of your property. We manage residential properties, multi-family properties and even homeowners and condo associations.

property managment
Amin & Will in Lowes

A big value-add provided by your Nesbitt Realty property manager is “separation”. This to say, your Nesbitt Realty property manager maintains a level of separation between the landlord and the tenants and the property. As you may already know, it’s important to invest in real estate without emotionally investing in tenants or property. Your Nesbitt Realty property manager helps ensure that you always make the best decision for your family, rather than making the best decision for the tenant’s family.

So, your Nesbitt Realty rental property manager serves as a buffer between the owner and his tenants. Nesbitt Realty can help you find tenants, handling repair projects and maintenance, oversee improvements, collect rent, and even pay some expenses and taxes. The specific tasks we handle vary based upon upon the needs and wishes of the property owner.

Nesbitt Realty Property Management also handles commercial properties such as office buildings, freeing the owners from the day to day responsibilities. Additionally, a competent Nesbitt Realty property manager gives you protection from certain liabilities.

Julie
Crunch-time processing rents!

Nesbitt Realty usually charges a percentage of the rents collected. Every aspect of Nesbitt Realty property manager’s responsibilities will be outlined in a contract signed by both Nesbitt Realty and the landlord. This agreement details financial responsibilities and specifies the types of financial reports the landlord can expect.

Your Nesbitt Realty property manager will stay current on new laws and condo regulations which may be relevant to your situation. Nesbitt Realty Property Management takes a lot of the burden off of owning rental real estate. Most Nesbitt Realty property managers are themselves landlords. They know your needs.

Sean
There is a first-time for everyone.

If you’ve never used a property manager before, you’ll probably want to learn as much as possible about the process and what exactly property managers do. In the broadest sense, here’s what all property managers do (or promise to do):

  1. Collect the rents. Put the rents into an escrow account. Disburse funds to pay bills, income to the landlord and fees to the property management company.
  2. Keep a record of all money and receipts and furnish that record on a regular basis to the landlord.
  3. Deal with HOA/COA.
  4. Manage tenant relations including maintenance requests, late fee notices. Deal with a laundry list of tenant problems: unauthorized guests, unauthorized pets, parking issues, tenant cleanliness, noise violations, neighbor complaints, etc. If necessary we manage the process of prosecuting actions to evict Tenants.
  5. Ensure compliance with state laws, local ordinances, licensing requirements, association rules, Fair Housing laws, insurance requirements, IRS requirements.
  6. Manage and dispatch handymen as needed.
  7. Inspect the property at the time of move-in at the time of move-out and from time-to-time during tenancy.

Money in general does not flow from the landlord to the property manager. Money flows from the tenant to the property manager to the landlord. Fees and commissions are withheld from collected rents.

Our standard agreement is a one year term, but either party can terminate the arrangement with 30 days notice.

The next step is to learn a little more about what differentiates us from other property managers.

[Learn more about our property management services now]

Nesbitt-Realty-wide-124

Our real estate agents care about our clients and love to help you achieve your real estate goals.

Julie and Will Nesbitt pause from property management to take a quick picture.
Julie and Will Nesbitt pause from property management to take a quick picture.
For more information or to set up an appointment call Nesbitt Realty at (703)765-0300.